Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages. Just because a business is in the green today doesn’t mean it will thrive tomorrow.
A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, here is one profitable company that leverages its financial strength to beat the competition and two that may face some trouble.
Two Stocks to Sell:
Mondelez (MDLZ)
Trailing 12-Month GAAP Operating Margin: 11.2%
Founded as Nabisco in 1903, Mondelez (NASDAQ: MDLZ) is a packaged snacks powerhouse best known for its Oreo, Cadbury, Toblerone, Ritz, and Trident brands.
Why Do We Think Twice About MDLZ?
- Falling unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 5.2 percentage points
- Free cash flow margin shrank by 4.2 percentage points over the last year, suggesting the company is consuming more capital to stay competitive
Mondelez’s stock price of $54.73 implies a valuation ratio of 17.9x forward P/E. Check out our free in-depth research report to learn more about why MDLZ doesn’t pass our bar.
Flex (FLEX)
Trailing 12-Month GAAP Operating Margin: 4.7%
Originally known as Flextronics until its 2016 rebranding, Flex (NASDAQ: FLEX) is a global manufacturing partner that designs, engineers, and builds products for companies across industries from medical devices to solar trackers.
Why Does FLEX Give Us Pause?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 3.1% annually over the last two years
- Low free cash flow margin of 2.8% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Eroding returns on capital suggest its historical profit centers are aging
At $68.26 per share, Flex trades at 18.9x forward P/E. To fully understand why you should be careful with FLEX, check out our full research report (it’s free for active Edge members).
One Stock to Watch:
MACOM (MTSI)
Trailing 12-Month GAAP Operating Margin: 13.4%
Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.
Why Does MTSI Stand Out?
- Impressive 22.1% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Offerings are mission-critical for businesses and result in a premier gross margin of 54.4%
- Earnings per share grew by 29.1% annually over the last five years and trumped its peers
MACOM is trading at $185.35 per share, or 43.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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